International inheritance
When a resident in Denmark dies the estate is taxed under Danish legislation. This will often result in taxation on the profits and gains of the deceased – followed up with inheritance taxation on top. Depending on the values and heirs the estate may suffer 50% tax plus 15-36% inheritance tax.
However it does not have to be this way. There are a number of ways and strategies to avoid or minimize this taxation. Family inheritance planning – national and international – can make a huge difference.
Before the estate becomes an estate – whit everybody alive – the possibilities are countless. With a Danish perspective and especially with an international perspective.
When death has occurred the options are more limited. However it is often worth the effort to try and optimize on distribution of the inheritance depending on the tax set up and domicile of the heirs. Further more it is possible to adjust the taxation date and thus the values taxable in the estate.
If the deceased was not a Danish tax resident, the taxation to Denmark of the estate is limited to the taxation of assets, property and stocks in Denmark owned by the deceased. Again it is possible to work with the taxation of the assets and the taxation date (i.e. stocks change in value).
In case the heirs are Danish resident and are to receive inheritance from abroad it is important to clarify the taxation of the heirs. There is in general not inheritance tax on inheritance from abroad. But if the heir receives assets, these assets will be covered by the Danish tax regime.
A special situation applies when all or some part of an inheritance includes at trust og funds from a trust. Trusts do not exist in the Danish legislation and the Danish tax system and courts often have challenges in how to look at payments from a trust. Is it taxable gift? Is it tax-free inheritance? Or have the funds been separated enough from the founder to become taxable income for the beneficiary?
At PrivatRevision we have comprehensive experience in dealing with international inheritance matters, trusts, foreign and domestic assets and in making inheritance strategy. We can off course also help with agreements that makes the heirs (and their heirs) the actual beneficiaries. Everything with the purpose of allowing the family to keep its values in the family. fjern